I have to disagree with Jay — or at least get tougher than he does — on a few key points:

First, buying a paper as it stands today is a no-win deal. Newspapers are not growth businesses. Though profitable, they are shrinking businesses. So any owner who comes in will be forced to make no end of tough decisions: cutting back staff, including newsrooms, and shifting the business from the formerly high-margin and monopoly print world to the lower-margin and highly competitive online world. Those decisions will be costly, bringing severence and possibly shutdown liabilities, as well as considerable unpopularity.

So I would challenge the business and editorial management and staffs of these newspapers to come up with their own tough and specific strategic plans so they can sell their future, not their past, to prospective buyers:

Yes, they should plan their own cutbacks everywhere in the operation, including the newsroom.

They should find the efficiencies that will allow them to increase the value of their products: Do we really need another movie critic? Do we really need to send our own guy to another damned golf tournament? Can we save money on the commodity news that takes up so much resource?

They should create their own strategies for partnering with the public to grow in coverage and local advertising.

The plans should be harshly realistic about revenue and margins five and 10 years out.

Then they should turn around and create a plan for investment in online and other media and in what makes their franchises uniquely valued: reporting.

In the end, they need to present a plan that shows how they will have a business that is not dependent on paper but instead uses any and all media available to serve and inform the community.

And they should get Knight Ridder to do all the tough stuff before a new buyer arrives, setting in motion and paying for layoffs, retraining, and retooling, so together they can sell a business that has a real strategy and higher value for shareholders, for employees, for the new owners, and for the community.

Second, Jay says that oftentimes, the would-be angels who want to rescue local papers are the worst possible buyers (see: the late Abe Hirshfeld at the NY Post; see also: Robert Maxwell, for whom I ended up working, at the New York Daily News). You don’t want someone who buys purely on ego, for eventually, bankruptcy trumps fame.

To guard against the loons and larceny, Jay suggests that the paper’s editor have veto power over a buyer. I disagree. Editors may pick people who’ll promise to increase the size of print newsrooms — that is, to do the fiscally irresponsible but editorially attractive. Editors are easy to seduce. They are fiscally horny. This has to be about creating a viable longterm business, or it just won’t work. So give the larger management team a veto or find a way to convene a vote of the staff.

Third, this will work only if the staff sees the alternate as dire: folding or continued life under a Scrooge regime at Knight Ridder or under a private equity buyer. So KR has to put forward a realistic vision of the future of newspapers — one that will scare the entire industry. That won’t make them popular in the business but it will let them look at themselves in the mirror a few years hence. KR also must open its books to make the exact financial picture for newspapers crystal clear.

Fourth, I would by no means limit this to local buyers and certainly not to industry buyers. Hell, I’ve moved lots of times and ended up loving the places where I landed. Just because I happen to live in a given town, that doesn’t mean I know more or care more than the guy in the next town. That is a wishful fiction of newspapering: that local is a virtue. Quite to the contrary, the fresher and perhaps farther the blood imported, the better. So why not see Craig buy Miami or or The Guardian Philadelphia or Yahoo San Jose? What this industry needs most is new perspectives, not just local perspectives.

Fifth, I would do the very unPC thing among the antimedia crowd and urge Congress, the FCC, and the Justice Department to grant exemptions from crossownership and even antitrust rules so that other dinosaur media businesses in these towns — TV, radio, online, and suburban papers — could figure out ways to merge and break down the barriers the built between media. That would build truly local news operations that are better prepared to deal with a future. If you don’t like national conglomerates buying local media, then at least allow local conglomerates a fighting chance. I am out there telling media companies that they have to break free of the shackles of their medium — that newspapers must stop thinking of themselves in terms of their paper, broadcast in terms of their broadcast towers — and yet that is how we are regulating media: forcing newspaper companies to own just newspapers, not broadcast, as each industry shudders against the fierce wind of the internet. Keep in mind why Knight Ridder is being forced to sell: because it became just a newspaper company in a new world where the medium doesn’t matter.

: Note: I just posted this on Huffington — my maiden voyage there. And, no, I didn’t do this to further piss off the OSM crowd. Jay started the discussion there so I chose to add to it there. And the fact that I can is rather, well, open-source of them, wouldn’t you say?

Well, Riffs, the new review-anything site, does one thing right that Amazon should have done from the first: You go to Riffs and write a review and it lets you get an RSS feed, which you can put on your own blog.

Still, I agree with Mike Arrington: “Do we need Riffs when everyone seems very happy writing reviews directly on their blogs?”

Fred Wilson tries out Riffs. But he has long pointed out that Gotham Gal has all kinds of reviews already on her blog. The question is: How do I find what she’s writing and find what other people are writing about the same topic so I can compare? How can I look for new restaurants in New York and find the ones she has found?

The service I’ll pay attention to is the one that lets me find the riffs and reviews (and recipes and whatever else) that people put on their own blogs. That can be a search engine or an aggregator or both that gets people to swarm around tags so they know their stuff will be found. It works inside Flickr and Del.icio.us. It can work outside, in the distributed web.

If I were a VC, I’d be investing in a company that tries to use tags and microformats and social interaction to link together the topics and opinions and information people care about on that distributed web. For that’s the company that won’t waste effort and expense trying to get people to change their behavior and reverse the natural flow of the web out to the edges — ‘come to us and give us your good stuff’ — but instead takes advantage of the essence of the web and leaves control out at those edges by saying: ‘We know you have good stuff and we’re going to help people find it.’ The consumer proposition is then clear: This is how you find the good stuff. This will be the real successor to and competitor against Google. Oh, Google could do it, too, but judging by Base, they’re not doing that. They’re taking control rather than giving it.

Steve Baker says anonymity is the next big industry. I don’t know whether it’s an industry, but there is value to add there. What do newspaper job classifieds and headhunters really provide but anonymizing? In the new world of jobs and resumes where buyer and seller can come together frictionlessly, there is some need for a trusted agent to act as the anonymizer (which may be newspapers’ last hope to keep a foot in that marketplace, if they figure it out and act quickly). Ditto personals, until you’re ready to meet and mate. Ditto some other commercial and informational transactions. It’s harder to provide anonymity in a distributed world but it still had value.

: LATER: Michael Zimmer says in the comments: ” ‘Pseudonymity’ is probably a more attainable goal.” Right, he is. And now let’s butcher that into a verb: pseudonymizing?

Gary Stein at Jupiter argues that the ad scarcity is real. I argued that it is a false scarcity created out of laziness or ignorance on the part of media buyers. Stein says:

Large brands seeking to make a significant impact will always seek high-profile placement.

Is that laziness? Not really. It is ego. Even if no one ever bought a Coke because they saw the neon sign in Times Square, it is still important enough to Coke’s brand and culture to demonstrate that they are big enough and strong enough to put that message in that spot. So, as long as there are new-model-car releases, brand-launches and opening-weekends, there will be a reason to pay tons of cash for the home page of Yahoo! Scarcity will exist for that, and it will keep prices high.

But the problem comes in if you say “well, Yahoo’s home page is gone, so there goes the campaign”. Online advertising is all about technology innovation and the twin turbines of targeting and optimization are will both increase the revenues for publishers as well as the effectiveness for advertisers.

The shortage? It’s just gonna lead to more technology innovation. Any network/serving technology/targeting system who can (really) do optimization is in a good place right now. They’re the ones who will benefit the most from a shortage.

Yes but….

The importance of any home page on any portal will decrease as more and more traffic is generated directly through searches and links. The problem remains that advertisers want to re-create TV; they want one-stop-shopping mass buys; they want upfront. But they shouldn’t want that because it only creates a scarcity that drives up prices. That’s why I say it’s laziness, because if they really did their homework and figured out that they can get better targeting, better reach, more efficiency, more effectiveness by engineering ad hoc networks tailored to their needs, they’d benefit greatly. But that takes work: not just the effort of putting together one flight but research and education and experimentation.

One agency and advertiser will figure this out and then the others will catch up for the same reason Gary cites: ego.

The American Press Institute puts $2 million into a project to find new business models for newspapers but I think they make a few mistakes: First, it’s not about new models for newspapers; it’s about new models for news. Second, the august group they gather for the task, though smart and experienced, are all from the big companies and the old ways. The newspaper industry’s worst fault is that it is insular and rejects new blood. This would have been a chance to find new people (and no, I don’t mean me) who are doing new things in new ways. That, ladies and gentlemen, is where the new models are going to come from, not from the old ways.

… the project goals also entail an “assessment of the threat to newspapers, including emerging competition”. Call it semantics, but this line of thinking continues to be insular. Instead of thinking about threats to newspapers, they should be thinking about learning (maybe even partnering) with the emerging competition that seems to be taking away their audiences.

Time Inc. announced that Andrew Sullivan is moving his blog to Time.com. Good for Andrew. But they got it backwards. They should have left Sullivan right where we was and sold advertising there. That would have extended their reach to a new audience. They’re thinking the old way: trying to draw people to their site and brand and buying content to do it. The new way would be to build your audience and brand and ad revenue all over the web, at all the best places, piggybacking on the audience and reputation that is already there. They’re thinking like a marketplace in a distributed world. [hat tip: Jay Rosen]

Here’s a conference I wish I could attend: the prediction markets summit.

Smart mobs, swarms, information markets, crowd wisdom, communities, trade exchanges social networks and knowledge markets — all are getting a lot of popular attention today. Why? Because they are highly effective.

Top knowledge scientists, information market practitioners, business school professors, think tanks and prediction market tool providers are converging for a one-day Summit in San Francisco/Silicon Valley on Prediction Markets.

It’s not just about predictions, of course. It’s about the crowd’s ability to define relevance (see: Google) and taste (see: Flickr interestingness) and news (Digg.com) and topics (Del.icio.us).